031110 n higgins project mg

Crews from Knife River Construction and Mountain Water Co. work replacing a 65-year-old water main in downtown Missoula.

MICHAEL GALLACHER, Missoulian

Mountain Water roundly dismissed Missoula's request for a transition period as “flawed to the core," according to their response with Missoula County District Court.

Responses from the Carlyle Group, Mountain Water Co. and its employees were filed last week, with unanimous disapproval of the city’s request that it receive Mountain Water documents and help from their employees to facilitate a smooth transfer.

Mountain Water called the request a “thinly-veiled” attempt to “begin taking possession of Mountain Water’s water system before the city pays one penny of just compensation into court."

“Under the law, payment precedes possession,” the response, drafted by Garlington, Lohn & Robinson of Missoula and Baker, Donelson, Bearman, Caldwell & Berkowitz, of Chattanooga, Tennessee, stated.

The response said the city unjustly asked the court to turn over essential documents, operations and employee services before paying for the utility, according to the Montana Code Annotated’s statute on condemnation, a statute Carlyle called “so simple that it hardly needs explication.”

That statute says, according to the Montana state website, “upon payment into court of the amount of compensation … assessed either by the commissioners or by the jury, the condemnor is authorized … to take possession of the property and use and possess the property.”

Carlyle and Mountain Water argued in their responses that Missoula is trying, with its request for a transition period, to effectively take over the utility without paying Carlyle the $88.6 million owed.

Concern that the city could back out of the condemnation during such a transition, or become unable to pay for the utility during the transition, fueled Carlyle’s issue with what they called a “free look.”

The statute, Carlyle said, does not allow for any sort of possession beyond a “simple relinquishment of possession” followed by the city taking control of the water company.

An August Missoulian article on the city’s request said they asked Mountain Water employees to cooperate with the city, and educate city officials with regard to operations and management of the water system. In addition, the city asked for all relevant business records and access to the water system so that the city is ready to take over operations upon payment of the money.

The response from Mountain Water employees, who are represented as a separate group from Mountain Water in the case, said they “do not wish to be caught in the position” of providing what has been deemed confidential information in a protective order regarding how Mountain Water operates, before the sale has taken place.

Mountain Water, which said it wasn’t speaking for its employees, said the court should not mandate any Mountain Water employees “perform any work, create or compile any information, provide any ‘education,’ or offer any other ‘assistance’ to the city.”

Carlyle’s response cited a March 2015 trial, in which Chief Administrative Officer Bruce Bender said the city already had a plan for how it would run the system, with or without Mountain Water employees, rendering a transition period facilitated by current Mountain Water workers, unnecessary.

“The city is asking the court to ignore the protective order … because the terms are no longer convenient for the city,” Carlyle wrote. “If the city wants to follow the law and pay the assessed fair value of the water system into court, then and only then, may it take possession.”

The city has until Tuesday, Sept. 20, to respond.

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